Customer Satisfaction in Retail Stores in Saudi Arabia - Research Paper Example

Marketing research study on satisfaction in retail stores in Saudi Arabia Affiliation The Outline Introduction 2. ment of the problem 3. Research questions 4. Literature review 5. Purpose of the study 6. Hypothesis 7. Survey methods 8. Sampling techniques 9. Data collection 10. Hypothesis testing 11. Discussion i. Factors influencing customers satisfaction and possible solution ii. Limitation of the study and future research directions 12. Conclusion 13. References Keywords: (Customers Net Value, Perceived Value, Desired Value, Service Gap, Customer’s Satisfaction, Customer’s Loyalty, E-Commerce, E-Retailer, B2C E-Commerce). Abstract Identification and creation of customer values is a broad term that can be considered to be very important and essential prerequisite as far as business success in Saudi Arabia is concerned. It should be noted that for a long term survival of any retail business and also when considering the competitive advantages retail store should have, the most essential consideration is customers retaining strategies which is normally achieved by accomplishing service satisfaction to the customer. The truth of the matter is that the current customer’s value construct being exercised by most of the Saudi’s retail stores are too narrow and on its simplistic status which is demanding (Rolph & Srinivasan, 2011). In addition to this, most retail stores in Saudi Arabia are mainly governed by poor advices. This is because they normally rests on very little scientific understanding of what and how customers usually derive and attain their satisfaction as the current customer value construct adopts a received value conceptualization (Rolph & Srinivasan, 2011). Moreover, its should be considered that proper measures has to be put in place precisely when managing customers trust, satisfaction and loyalty attitude they have developed towards the services being offered within the retail stores. The biggest challenge most Saudi Arabia retail stores face is maintaining customer’s loyalty despite records showing expansion in retail businesses throughput the region. Under this regard, this paper will elaborately work on identifying and analyzing all possible factors that may in one way or the other influence customer’s loyalty towards goods and services offered by retail stores in Saudi Arabia. This will include broad discussion on the entire operationalized strategies and also the measures that most previous research proposed which will aid in attainment of comprehensive customers value construct (Rolph & Srinivasan, 2011). Noting is the fact that when working on customers desired values within a retail store, it is prudent to note basic customers received values and customer’s net values as measure of boosting customer’s satisfaction (Rolph & Srinivasan, 2011). Introduction Value is the key concept that has helped most businesses to prosper in retail sales. This is precisely because value is a fundamental marketing factor and most considered entity that customers look for before approaching a retail store. This means that for the success of the any retail business, developing a superior customer values which are mostly desired is indeed a vital necessity precisely when it comes to securing the business niche in a competitive environment (Eid, 2011). This comes when most researcher have settled at value creation as the most influential and contributing factor towards gaining competitive muscles and which also contributes in being recognized by customers. Saudi Arabia is fast growing in business and this is supported by huge population growth with approximately 28 Million people (Eid, 2011). It is by this factor that many retail businesses have been established in Saudi Arabia which is fighting to dominate and survive powerful business competition in the area. In addition to this, technology has also grown to an extent that over 3.5 million people are internet users and with 14.26% being active e-commerce subscribers (Eid, 2011). This means that many people are also involved in e-commerce from online retailers. Similarly, it is the customer loyalty and strategic customer retention plan business enforce that ensures customers satisfaction thus subscribe to the retailers services. Businesses with poor customers services often fail to retain most of its customers thus lose in the competitive field. This study also aims at identifying and acknowledging the empirical examination of customer’s loyalty, satisfaction and trust most specifically in retail stores and B2C e-commerce portal in Saudi Arabia. B2C e-commerce is a major technological and web development that has seen 9.3% growth in enrolment as people in Saudi Arabia seek the service when shopping in online-retail stores in the region (Eid, 2011). To support this statement, 2010 financial reports in Saudi Arabia revealed that SR12 Billion of money spent in Saudi Arabia is spent by customers who use e-commerce to buy goods (Eid, 2011). Acknowledging the importance and the role played by most retail store in embracing technology as a measure of satisfying and retaining customers, it evident that e-commerce is an important tool for accomplishing customers satisfaction in Saudi Arabia as far as easier service provision is concerned (Eid, 2011). Statement of the problem Quality of the services and goods delivered by most retail business is the core influencing factor toward direct customer’s satisfaction. It has been noted that in most retail stores in Saudi Arabia that sales have been dropping gradually alongside low customer’s turnout. This negative progress in business has been noted to be as a result of customer’s dissatisfaction with the services offered (Eid, 2011). In addition to this, downfall of a business begin when customer’s complains can not be considered and their claim toward low quality of goods and services never taken to be serious (Eid, 2011). These are some of the strong factors that eventually cost decline in business due to customer’s migration to other retailers in search for quality satisfactory services. Unfortunately, not all retail stores in Saudi Arabia are effectively aware and implement customer retention plan that will oversee customer care and satisfaction. Notable to mention is that the only factor that demonstrates physical evidence of the retail service provided and competence is quality work (Eid, 2011). Quality of service provided is directly linked to trust and together generates intrinsic motivation and loyalty of customers toward the business store. Research questions 1. Do customers in Saudi Arabia consider that quality goods and services are the key factors influencing customer’s satisfaction and trust? 2. Do Saudi Arabia e-commerce customers consider that security and confidentiality are the key factors influencing customer’s satisfaction and trust? 3. Does customers satisfaction a contributing factor towards customer’s loyalty and trust? Literature review Based on the popular Theory of Reasoned and Action (TRA), it is clear that there is a positive relationship between attitudes, intentions and behavior among human beings (Eid, 2011). The TRA model further explain that most human beings do make a rational decision depending entirely on the information they have about whatever they want to be engaged with. Moreover, the little information human have also serves as the broad and immediate determinant of the persons behavior which is intent and cognitive representation showing readiness to perform a given behavior (Eid, 2011). It is also noted that quality of information granted to customers by retail stores and e-commerce website content also forms a major influencing factor that contributes to either positive or negative behavior (Eid, 2011). If the information disseminated to customers by the retailer either through marketing online or advertisement is accurate and reliable; it forms the basis as to whether the customer will make the purchase or not. In this regard it is the information given to customers that assures satisfaction, positive behavior to purchase, trust and can also affect customer’s retention (Eid, 2011). The other theory which basically aims at assessing customer satisfaction behavior is the Expectation-Confirmation Theory (ECT) which was developed by Oliver in the year 1980 (Eid, 2011). According to this theory, consumers or the customers normally develop an initial expectation attitude toward the goods and services they will be seeking prior to the purchase process. This attitude is also developed on the perceptions about the performance of the consumed products or services after a period of previous consumption of the goods or services (Eid, 2011). This is followed by the customer decision on their level of previous satisfaction which is entirely based on the levels of satisfaction attained currently by comparing with the previous experience over the same goods or services purchased (Eid, 2011). Under this circumstance, customers who are eventually satisfied with the retail store after such experience always without fail trust, become loyal and are motivated to continue purchasing from the same retail store and even recommend other on the same place. This is how customer retention and business growth continues. Contrary, if the customer experience would be doubtful, then low levels of services satisfaction will initiate the behavior of exploration to other retailers seeking for heart pleased satisfied retailer (Eid, 2011).. Under this occasion customer retention is compromised and this is dangerous to the business (Eid, 2011). Purpose of the study To identify customer expectations in relation to customer service in Saudi Arabia retail stores and online retailer. To develop specific questions which would be able to provide the researcher with direction aimed at solving the main problem. To establish the extent in the customer service is not adequate. To establish employees roles and how are they engaged in customers satisfaction plan. Hypothesis It should be noted that this paper targets demonstration of the relationship between quality services and customers satisfaction in retail stores in Saudi Arabia. With this, it can therefore be hypothesized that: HA: an increase in perceived quality and security of products and services will have a direct positive effect on customer’s satisfaction, trust and loyalty. HO: An increase in perceived quality and security of products and services has no effect on customer satisfaction, trust and loyalty. Survey methods In a bid to test the hypothesis stated and also to achieve the stated research objectives, the study employed survey research method. To accomplish this, survey questionnaire were effective for the study. The questionnaire was widely distributed among Saudi Arabia retail stores customers. Notable to mention is that the questionnaire which served as the instrument for data collection adopted a structured self-administered questions which broadly reflected the conceptual framework (Bakar, Ruwais and Othman, 2013). Additionally, noting that there is Arabic and English speaking respondents in Saudi Arabia, the data collection instrument was developed comprising of two columns; where one part was written in Arabic and the other part in English. The entire questionnaire was developed with three main parts. The first part included general information concerning Saudi Arabia customers involvement with retail stores, the second part targeted the customers opinion that measured the study construct and final section collected details of the respondents age, gender, education level, occupation and financial muscles (Bakar et al, 2013). Sampling technique Sampling process is very essential in any research survey. This is the process where participants of the research study are selected with an aim of achieving 100% representation of the entire area of study (Harding, 2006). To effectively cover a larger cohort the strata selected must be composed of overlapping subgroups which should carefully be selected in order to attain fair selection criteria of research participants. In this regard, stratified random sampling was the best technique to be used. The principal behind stratified random sampling is the fact that the main objective attained ensures that the specific subgroup within Saudi Arabia population has been highlighted (Harding, 2006). The other reason for employing stratified random sampling is also to allow the researcher observe accurate relationships between two or more subgroups within the area of study which in this case is Saudi Arabia (Harding, 2006). The collective sample of interest should follow the rule of certain characteristic variability. The technique is also time saving and very relevant for short term research which have limited time allocated. Additionally, stratified random sampling is also very easy to administer primarily when the resources to be used in the research are limited. The technique also allows the researcher to divide the entire area under study into strata in which individual member within each strata are to be selected randomly to minimize errors (Harding, 2006). Data collection The data collection technique was based on the survey method which was made up of random set of tertiary population within Saudi Arabia. The population was composed of students and working groups of people residing in different parts of Saudi Arabia (Bakar et al, 2013). Moreover, the unit of analysis for this survey was consumers who had elaborate experience of purchasing from various retail stores in Saudi Arabia. Additionally were the consumers who were also subscribers of online B2C e-commerce services (Bakar et al, 2013). This also targeted specifically on finding out customers satisfaction in relation with online purchase in Saudi Arabia. The process ensured gross generalization sticking to the identified strata where the questionnaires were distributed randomly (Bakar et al, 2013). The distribution was equally done randomly to ensure that results obtained covered opinion of the entire region basing on the strata’s established during sampling. Total of 500 questionnaires were distributed using the drop off/pickup method of administering the data collection tool (Bakar et al, 2013). This method was the best noting the fact that the research had limited resources, time and expertise power. Out of the 500 administered questionnaires, 43.6% or 235 were returned back with full information filled with only 17 questionnaires being declared invalid (Bakar et al, 2013). Hypothesis testing For this study, the research model hypotheses were tested using ordinary least square multiple regression equation (Bakar et al, 2013). Based on the research, the null hypothesis (HO) was rejected since Saudi Arabia residents proved that quality of goods and services offered were the main determinants toward customer satisfaction and retention toward any retail store (Bakar et al, 2013). This is because the variables quality goods and service and customers satisfaction were found to have a significant relationship by positively influencing each other (Bakar et al, 2013). With the obtained results, it was clearly evident that the Alternative (HA) hypothesis was supported by the findings of the research where as the null hypothesis (HO) was rejected. Discussion Based on the results obtained from the above survey, it is absolutely critical to mention that customer satisfaction is a behavior that is mostly contributed by quality services and proper sharing of information by the retailer (Bakar et al, 2013). The notion being declared here is the fact that in Saudi Arabia culture, many retail store purchasers prefer quality of goods, services and information as the most paramount motivator toward customer’s loyalty to the store (Bakar et al, 2013). Additionally, for customers who technologically employed e-commerce purchasing were motivated by the quality and security of the services offered by the online retailer (Bakar et al, 2013). However when it comes to e-commerce in Saudi Arabia, information disseminated to customers was not a major determinant toward customer’s satisfaction as it is perceived. The main important strong contributor toward customer trust was security risks and confidentiality of customer’s private information was the paramount consideration in many residents of Saudi Arabia (Bakar et al, 2013). It is important to note that customer’s satisfaction is a direct antecedent of consumer loyalty and business retail store in Saudi Arabia (Bakar et al, 2013). This is similar message other researcher revealed concerning customer satisfaction strategies. For the success of any business, it is the mandate of the retail management to ensure that customers are satisfied with their services in order to groom their loyalty and trust. Additionally although the customer value literature has broadly identified the importance of customer value in consumer studies, the research exploring customer value have been relatively limited (Eid, 2011). It is also very necessary to identify and discuss the gaps which are there as a result of customer values literature as far as retail stores in Saudi Arabia is concerned. It should be noted that retail customers in Saudi Arabia have specific set of perceived, desired and expected values that retailers need to factor in order to satisfy them. Under normal circumstances each customer has hidden interest that motivates them to stick to a specific retailer and purchase goods or services there (Eid, 2011). It is upon the retailer to develop strategies that are customer centered and also develop intrinsic knowledge of their customer’s needs and expectation in order to attract and retain them (Eid, 2011). It is also the mandate of the retailer to actively manage their customers rather than just providing the finest product and services with hope for the best assumption dominating their minds (Eid, 2011). In addition to supplying latest goods and services, there is need of the urge to know more of what the customer feels and how they perceive the services offered. Factors influencing customer’s satisfaction and possible solution The quality of products or services offered by the retailer is very critical in winning customers trust and satisfaction in the business. This is because the information about the products or services disseminated to customers via advertisement of the retailer website influence directly the perception people have on the business. In this regard, channels of communication retailers in Saudi Arabia use to reach their customers have been urged to be an antecedent of customers trust and loyalty (Bojei, Julian, Wel & Ahmed, 2013). When technology is employed by the retailer to ease customer’s involvement, there is need to establish systems that are reliable and secured. It is noted that most customers in Saudi Arabia who embrace online technology to purchase goods or services from retail stores are more satisfied with system that are secured primarily when it comes to handling of customers private data (Bojei et al, 2013). This is vitally essential since customers trust is compromised the moment confidential information concerning their financial status is subjected to risks. With development and advancement of technology globally, online businesses have to protect their customers from hackers and fraudsters and this is what most people consider subscribing to reliable secured retailer who they trust (Bojei et al, 2013). It is therefore the work of the retailer to ensure that online customers are satisfied with their services and security in order to retain and attract more subscribers (Bojei et al, 2013). It should be noted that loyal customers are very instrumental to the success of the business since they serve as informers by spreading news about the retail store to other people back at home. By informing others about the reliability of the business, many customers will join thus the success and growth of the business (Bojei et al, 2013). In this regard it is prudent to state that both customer’s satisfaction and customers trust do correlate positively with customer’s loyalty in the larger Saudi Arabia retail business world. Employees motivation toward customers interaction and service offered in also very essential in achieving customers satisfaction. This can be achieved by the employer ensuring that employees are properly trained in customer care and relation (Bojei et al, 2013). This will empower employees to know how to handle customers in a desired manner and how to solve challenges that emanate from the customer. It is evident that when a customer is harassed or neglected by employees of retail store, they get disappointed and opt to seek alternative shopping store. Therefore employers need to ensure that employee have the hospitality of the highest standards which can be acquired through formal training. To supplement on this, there is need to establish customer care desk which is operational 24 hours and which target local and online customers (Bojei et al, 2013). The customer care desk both local and online will work on solving challenges or offering solution to customers who are new and have no information on how the retail store operates. The customer care desk will also be the first alternative center for solving disputes customers may face while within the retail store. This can be issue related to mistreatment, overcharged goods, and credit cards issues among many other challenges. The main objective for customer care desk is to ensure that customers have a place they can go to when uncomfortable and their issues will be solved instantly. This allows customers to be satisfied with the services hence will always come back for shopping. Furthermore, presence of a suggestion/complain box is another strategy that open platform for customers to contribute in management of the retail store (Bojei et al, 2013). Suggestion boxes allow customers to report uncouth behavior including corruption, harassment, theft and also make suggestion on how the business can improve to satisfy their needs (Bojei et al, 2013).This exposes the business management to know customer’s perception and feeling concerning the goods and services hence improve to satisfy the customers. Limitation of the study and future research directions Despite all the positive and useful information provided by the research study, there are vast areas where negativity was perceived. This includes all the weaknesses exhibited during the study. The majority of the respondent’s feedback the study engaged in were male dominated (Rambo & Liu, 2011). This is a weakness since the gender balanced perception was not covered as pre-planned. The main challenge came up as a result of the culture of people in Saudi Arabia. The community grants the mandate of retail shopping to males. This local patriarchal society also engages the male’s members of the family in conducting the daily activity including household and grocery shopping on behalf of the family members (Rambo & Liu, 2011). It is therefore relevant to note that future research needs to consider this and improve on gender balance in order to attain the correct community perception regarding customer satisfaction strategies (Rambo & Liu, 2011). The other concern to future research is the focus on developing a valid scale that will identify shopper’s types according to consumer shopping desired values which will facilitate relative studies (Rambo & Liu, 2011). In summary, the study finding was very successful in answering the two main objectives of the research questions. This form a true reflection on the real business situation where competition is stiff and most business firms are looking for ways to retain their customers. In addition to this, the study has also contributed toward academia world where it is known that quality goods and services are the main contributing factor towards customer’s satisfaction and loyalty development (Rambo & Liu, 2011). For online marketers in Saudi Arabia, it is now evident that security risks and confidentiality of customer’s information is the key determinant towards customer’s subscription and trust with the service (Rambo & Liu, 2011). Conclusion The main objective of this paper was to enlighten retailers in Saudi Arabia and the rest of the world on measures that were essential as far as customer satisfaction is concerned. It is noted in this research study that there are factors which are directly related to customer’s satisfaction and retention in retail shopping store. Additionally, a theoretical research model which hypothesizes the key factors influencing the three key constructs has been developed and statistically validated (Rambo & Liu, 2011). According to this report it is clear that quality of the goods and services, customer’s security and confidentiality of private information are the key factors that customers look for in retail stores and online market respectively (Rambo & Liu, 2011). This are the basic factors that contribute toward development of permanent trust and loyalty that customers gain which makes them intrinsically attracted to shopping in the retail store. In addition to this, it is the mandate of the retailer to ensure that customer leaves the retail store happy and motivated. This will depend on how the retailer will interact with the customer through conversation and finding out customer’s perception before they leave the store. This is relevant in case the customer was offended, the retailer can take that opportunity to correct the situation and release the customer happy. This is done with the mind that some customers are difficult and unbearable by nature. It should be noted that for the success of any business, the number of customers visiting the retail store is very important factor which can only be maintained or increased by ensuring that all customers are satisfied with the goods and services offered (Rambo & Liu, 2011). References Bakar, AR., Ruwais, NM and Othman, AR. (2013). Customer net value: a service gap perspective from Saudi Arabia. Global journal of business research. 7: 4. Bojei, J., Julian, C. C., Wel, C. A. B. C., & Ahmed, Z. U. (2013). The empirical link between relationship marketing tools and consumer retention in retail marketing. Journal of Consumer Behavior, 12, 3, 171-181. Eid, M. (2011). Determinants of e-commerce customer satisfaction, trust and loyalty in Saudi Arabia. Journal of electronic commerce research. 12: 1. Harding, J. (2006). Stratified sampling. Accessed May 14, 2014 from http://srmo.sagepub.com/view/the-sage-dictionary-of-social-research- methods/n200.xml. Rambo, K., & Liu, K. (2011). Culture-Sensitive Virtual E-Commerce Design with Reference to Female Consumers in Saudi Arabia. Rolph, E. A., & Srinivasan, S. (2011). Customer Satisfaction and Loyalty in E-Markets: A PLS Path Modeling Approach. The Journal of Marketing Theory and Practice, 19, 2, 221-234. S Read More